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Obama leaves climate change-fighting tool on shelf for now

By Patrick Rucker and Valerie Volcovici

WASHINGTON (Reuters) - President Barack Obama has vowed to tackle climate change in his second term, but so far has not acted to strengthen a tool that does not require backing from Congress - the National Environmental Policy Act.

NEPA, a statute that dates to the Nixon administration, calls on officials to weigh whether projects such as highways, dams or oil drilling could harm the environment.

While it does not have the power to block development, NEPA forces officials to consider the environment before approving federal projects, and the White House has proposed that climate change should rank high among those concerns.

In early 2010, the White House suggested it would make an update to NEPA that would require counting greenhouse gas emissions among the impacts worthy of a NEPA review. But those standards have been on ice ever since they were written.

"We are taking the time necessary to carefully consider all input from the public, stakeholders and federal agencies," said Taryn Tuss, a spokeswoman for the White House Council for Environmental Quality (CEQ), the steward for NEPA.

Although changes to NEPA don't require White House review, several other cabinet agency rules have been held up by that process amid election-year politics and Republican complaints of costly over-regulation.

Democratic lawmakers have called on the White House to weigh climate change in proposals like the Keystone XL oil pipeline and coal export terminals planned for the Pacific Northwest.

Industry groups and Republicans, though, have warned Obama to keep NEPA out of the climate change debate.

LEGACY CONCERNS

Former White House officials say Obama must soon test the rule's power to confront climate change if he wants to cement a legacy of trying to wean the nation off polluting fossil fuels.

"A president who wants to lead on climate change does not have many tools that do not involve Congress. One of them is NEPA," said George Frampton, who led the CEQ in the final years of Bill Clinton's presidency.

Several former U.S. officials said the White House is at least a year away from blessing a climate change component of NEPA - if such a move is taken at all.

"I would think any revision is a ways off," said a former EPA official who dealt with NEPA issues.

Efforts by Congress to set mandatory limits on carbon emissions failed to pass in 2009 and 2010 amid intense partisan wrangling. Other administration pollution rules have also been challenged in the courts.

But with little hope of moving new comprehensive climate change legislation through Congress, the White House is running out of time to use its executive power to confront an issue that Obama has said requires urgent action.

"No one measure will halt climate change," said Jessica Goad of the Center for American Progress, a liberal think tank with ties to the White House.

"But this is certainly one modest step. And we are talking about rules that have been on the shelf for three years."

The administration has recently announced some actions targeting climate change, including a deal with China to reduce HFCs, a potent greenhouse gas used in air conditioners and refrigerators.

But it has given no sign it will finish the more controversial NEPA update, which could have an impact on some major energy projects.

BACKDOOR REGULATION?

Since it came on the books in 1970, NEPA has been used as a tool to scrutinize - and sometimes stall - big government developments.

And while environmentalists are eager to use the statute to consider the long-term impacts of climate change, industry groups worry the added layer could be crippling to projects.

"Let's say you want to build a solar farm. Well, were those solar panels built in China using coal power? How far back do we trace these supposed impacts?" said Bill Kovacs, a senior energy adviser with the U.S. Chamber of Commerce.

Republican lawmakers agree. In April, 33 senators signed a letter discouraging the White House from finalizing the standards, saying NEPA would be a way to regulate carbon emissions without congressional approval.

And some Democratic lawmakers do have big plans for NEPA.

The governors of Oregon and Washington want the White House to apply NEPA as it weighs whether to speak up against coal export terminals planned for the Pacific Northwest.

The statute should not only weigh the impact of exporting U.S. coal but how burning the fuel in furnaces overseas could worsen climate change, the governors argue.

While the NEPA rules remain unfinished, government agencies are coming up with different conclusions about what some controversial projects will mean for climate change.

A State Department review found that burning oil sands fuel would not substantially worsen climate change if the Keystone XL pipeline were permitted to cross the border from Canada, while the EPA found the impact to be significant.

The Army Corps of Engineers, which is reviewing the coal export terminals, has declined to weigh global impacts while local governors have pressed for such studies.

The Chamber of Commerce's Kovacs says the White House is wise to move slowly as it considers retooling NEPA but former officials say there is no time for delay.

"Time is running out to do something meaningful that will have an effect in Obama's second term," Frampton said.

(Reporting by Patrick Rucker and Valerie Volcovici; Editing by Ros Krasny and Eric Walsh)

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